Helping employees save and prepare for retirement has taken on a more urgent tone for employers this year, according to a new survey.
Human resource solution provider Aon Hewitt recently surveyed more than 425 U.S. employers, representing 11 million employees, to determine their current and future retirement benefits strategies.
Eighty percent of respondents said they are making financial wellness a top priority in 2013. Sixty-one percent are looking beyond current participation and savings rates and are helping workers evaluate their retirement readiness, up from 50% in 2012, Aon Hewitt said.
Additionally, 86% of companies said they plan to focus communications initiatives on helping workers evaluate and understand how much they need to save for retirement.
To help workers reach their retirement goals, employers continue to offer and promote the use of investment advisory tools, according to Aon Hewitt. Seventy-six percent said they currently offer target-date funds as a way to provide workers with a simple and straightforward approach to investing. Of those who do not offer target-date funds, 35% said they will likely add this option in 2013.
Managed accounts and online third-party investment advisory services also continue to gain popularity at 64%, up from 40% in 2012.
To get retirement readiness messages out to employees, some companies plan to turn to social media, podcast and text messages.
The percentage of plan sponsors that plan to use social media channels to communicate with workers has tripled from 6% in 2012 to 18% in 2013, the data showed. Fifty-two percent will use podcasts and 42% will use text messages to communicate and educate their workers on their retirement benefits this year.
“Employers understand that financial wellness is more than what workers are doing today in terms of savings in their retirement programs – that it's evaluating whether their long-term investment strategies are positioning them to be ready when it comes time to retire, and whether other priorities are getting in the way,” said Patti Balthazor Björk, director of retirement research at Aon Hewitt in Lincolnshire, Ill.
Taking another looking at their defined contribution plan features, employers are also striving to make investing easier and more accessible. Thirty-seven percent of the survey’s respondents said they have recently reviewed the total DC plan costs including fund, recordkeeping, and trustee fees. Among those who have not, 95% are likely to do so in 2013.
Thirty-five percent of employers completed a review of DC fund operations, including fund expenses and revenue sharing while 87% plan to do so this year. Thirty-one percent of employers recently changed their DC plan fund lineup to reduce costs and more than half (52%) of the remaining companies may do so in 2013.